Tesla Slashed By Morgan Stanley Due To Oversupply In EV Market
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Electric vehicle manufacturer Tesla is at the center of a bearish analyst note by one of its biggest fans, Morgan Stanley, who has reduced its share price target for the company. Tesla, the world's largest EV manufacturer, struggled during 2023 as high inflation coupled with a slow credit environment led to a sales slowdown. Now, Morgan Stanley believes that Tesla is in for more pain this year, as the bank reduces the firm's share price target by 9.2% to $345 from an earlier $380.
Global EV Market Is Facing Demand Supply Mismatch Says Morgan Stanley As Part Of Its Tesla Downgrade
2024, despite being less than a month old, is already shaping up to be quite controversial for Tesla. The year started out by its chief Elon Musk sharing on X that Tesla's share structure makes him uncomfortable to scale the firm as a leader in artificial intelligence and robotics. As opposed to traditional car companies such as Ford, Musk's Tesla runs one of the largest supercomputers in the world as part of its autonomous driving project and is also making a humanoid robot.
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Both are high growth industries, and a large portion of Tesla's $664 billion market capitalization is also based on the treasure trove of driving data it controls.
In its note, Morgan Stanley shares that it is adjusting its valuation estimate for Tesla in light of the potential troubles that lie ahead. However, the firm's note also explicitly mentions artificial intelligence and robotics, indicating that Musk is on the right track with his approach, at least as far as Morgan Stanley's Adam Jonas is concerned.
The text of the note, courtesy of Stock Talk, is as follows:
As the note also shares, Tesla's earnings call are due later this week, and Jonas appears to be providing
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